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Congress: A GOP shift in the payroll tax

“Top lawmakers from both parties are proposing to offset the cost of extending a U.S. payroll tax cut, establishing markers for negotiations over how to prevent the break from expiring Dec. 31,” Bloomberg reports. Senate Minority Leader Mitch McConnell hasn’t said how Republicans plan to cover the forgone revenue from extending the 2 percentage point reduction in employees’ portion of the Social Security tax. Senator Jon Kyl, the second-ranking Republican, said details would be available by today. Democrats have proposed extending and expanding the tax break. The Democrats’ $265 billion proposal would be offset by a 3.25 percent surtax on annual income exceeding $1 million, and a test vote is planned for this week on the proposal.”

The Hill frames it this way: “Senate Republicans will offer a new proposal to extend the payroll tax holiday as they battle with Democrats for supremacy on taxes. Republicans earlier this year dismissed an extension of the cut as a ‘sugar high’ that would do little to create jobs, but Senate Minority Leader Mitch McConnell (R-Ky.) announced a shift in strategy on Tuesday, saying he would offer the GOP offset for extending the tax holiday.”

“With the super committee's failure last week, industrious lawmakers are grasping yet again at the opportunity to reach a sweeping deficit reduction deal — but they face the same obstacles that have crushed every group that's tried,” Roll Call reports. “Still seeing an opportunity in the bleakest of legislative outlooks, the bipartisan ‘gang of six’ [which is now eight] met for dinner Monday night in the Capitol office suite of Senate Majority Whip Dick Durbin (D-Ill.) to discuss a post-super-committee Congress.”

By the way, still on Congress’ pre-Christmas to-do list, per Roll Call: “extending the payroll tax cut, extending unemployment insurance benefits for the long-term jobless, passing a raft of expiring tax provisions known as extenders, patching the alternative minimum tax, acting to prevent a cut in payments to doctors who treat Medicare patients and passing a spending package made up of the remaining nine annual appropriations bills.”

Norm Ornstein on Barney Frank’s departure: “It is difficult to stand out as one of 435 of anything — and that is even more true in a cacophonous place such as the House, which is filled with big personalities. Some stand out just by saying outrageous or over-the-line things, which is now, sadly, a surefire way to raise big bucks and even become a presidential candidate. But few truly stand out, becoming forces inside Congress and outside because of their ideas and their legislative talents. For decades, Frank has been in that small category, and his departure from the House will leave a big void.”

And he places the blame on Republicans for the failure of the Super Committee: “I believe the major reason was the breakdown on taxes — the inability of the Republicans on the panel to commit to anything in the vicinity of the area of the neighborhood of $1 trillion in revenues, even for a grand bargain.”